Slide 1: First-Quarter 2025 Earnings Webcast
First-Quarter 2025 Earnings Webcast May 1st, 2025 1
Slide 2: Today's Presenters
Today’s Presenters Bill Cobb Jessica Ross Matt Davis Chairman & Senior Vice President & Vice President, Chief Executive Officer Chief Financial Officer Investor Relations and Treasurer 2
Slide 3: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements
Slide 4: First Quarter 2025 Highlights
First Quarter 2025 Highlights Revenue increased 13% to $426M Net Income grew 9% to $37M Adjusted EBITDA* grew 41% to $100M Member count increased 7% to 2.1M Percent-to-Preferred Contractors increased to 85% *This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measure
Slide 5: Executing on Our Strategic Priorities
Executing on Our Strategic Priorities Grow and Retain Scale Optimize the New Warranty Non-Warranty Integration Members Revenue of 2-10 5
Slide 6: Organic Direct-To-Consumer Member Growth of 4%
Organic Direct-To-Consumer Member Growth of 4% DTC Home Warranties (in thousands) Actions to grow member base +15% are working 310 • Brand relaunch • Targeting new audiences 270 • Mid-funnel digital advertising • Media optimization • Discounting strategy Q1 2024 Q1 2025 * *Q1 2025 DTC home warranty
Slide 7: Real Estate Market Remains Challenged
Real Estate Market Remains Challenged Existing Home Sales Continue To Be National Association of Realtors March Release Near 30-year Lows (in millions) • Existing-home sales slipped 5.9% in March to a 6.12 seasonally adjusted annual rate of 4.02 million 5.64 5.34 5.03 • Median existing-home sales pr
Slide 8: Retention Rates Remain Strong
Retention Rates Remain Strong Customer Retention Rates¹ Retention Highlights: • Mix shift benefit 79.9% • Improving customer engagement 76.3% • Improving customer service • Expanding use of Preferred Contractors • Increased customers on autopay 2024 Q1 2025 Q1 (1) Customer retention rate is presente
Slide 9: Key Product Differentiators Improve Customer Experience
Key Product Differentiators Improve Customer Experience AHS App Video Chat With An Expert • Since app launch in late October… • Members love this new feature ✓ ~200K downloads • Currently ~17% of video chats ✓ ~80K service requests ending with a solve - saving time submitted and money 9
Slide 10: Increasing Non-Warranty & Other Revenue Outlook
Increasing Non-Warranty & Other Revenue Outlook Raising 2025 New HVAC sales target to ~$105M • Positive demand trends • Increasing contractor participation Moen continues to grow • Expanded Moen partnership, now in 21 states in 2025 New Home Structural Warranty • Expected to generate ~$44M in 2025 1
Slide 11: First Quarter Financial Results
First Quarter Financial Results 11
Slide 12: First Quarter 2025 Financial Summary
First Quarter 2025 Financial Summary ($ millions) Revenue Net Income Adjusted EBITDA* +13% +9% +41% 100 426 37 378 34 71 Q1 2024 Q1 2025 Q1 2024 Q1 2025 Q1 2024 Q1 2025 * This financial measure is a non-GAAP financial measure. Refer to “Non-GAAP Financial Measures" in this presentation for a descrip
Slide 13: First Quarter 2025 Earnings Per Share
First Quarter 2025 Earnings Per Share Earnings per Share Adjusted Earnings per Share* +13% +46% $0.64 $0.49 $0.43 $0.44 Q1 2024 Q1 2025 Q1 2024 Q1 2025 Note: All referen ces to ea rnings per sh are are presented on a diluted basis. * This financial measure is a non-GA AP fina ncia l measure . Refe r
Slide 14: First Quarter 2025 Gross Profit
First Quarter 2025 Gross Profit Gross Profit +21% 235 55% 195 Gross Profit Margin Q1 2024 Q1 2025 +380 bps YoY ($ millions) 14
Slide 15: FTDR Proactively Monitors Multiple Data Points to Manage Cost Inflation
FTDR Proactively Monitors Multiple Data Points to Manage Cost Inflation Tracking Current Economic FTDR Cost Trends Events Indicators • Tariff Announcements • Consumer Confidence • OEM Pricing • Policy Changes • CPI/PPI • Contractor Costs 15
Slide 16: Leveraging Scale to Manage Costs
Leveraging Scale to Manage Costs Supply Chain Management Contractor Management •1 Improving parts and equipment availability •1 Managing cost per service request •2 Leveraging purchasing power to keep •2 Optimizing use of Preferred Contractors for costs down cost and quality •3 Reallocating sourcing
Slide 17: Dynamic Pricing Optimizes Member Count and Protects Margin
Dynamic Pricing Optimizes Member Count and Protects Margin Average Realized Price* Increasing 4% in 2025 $1,100 Dynamic Pricing $933 $897 $900 $874 $792 $731 $700 Trade Service Fee $500 2021 2022 2023 2024 2025F *All home warranty brands 2018-2025F 17
Slide 18: First Quarter 2025 Adjusted EBITDA
($ millions) First Quarter 2025 Three Months Ended March 31, 2024 $71 Adjusted EBITDA* Impact of change in revenue (1) 32 Contract claims costs (2) 8 Customer service costs (4) 41% General and administrative costs Interest and net investment income (10) 2 Increase YOY Other 1 Three Months Ended Marc
Slide 19: Robust First Quarter 2025 Cash Flow
Robust First Quarter 2025 Cash Flow Three Months Ended ($ millions) March 31, Free Cash Share Flow* Repurchases Net cash provided from (used for): 2025 2024 $117M $70M Operating Activities 124 84 Investing Activities 47 (10) Restricted Unrestricted Financing Activities (85) (21) Cash Cash Cash incre
Slide 20: Frontdoor Has a Strong Financial Position
Frontdoor Has a Strong Financial Position • Strong liquidity position of $570M¹ Net Leverage Ratio* (Net Debt /Adjusted EBITDA) • Prudent net leverage ratio of 1.9x; 1.9x below long-term target of 2.0x to 2.5x • Next debt maturity in 2029 • Capital light business; Capex less than 2% of revenue • Str
Slide 21: Increasing 2025 Share Repurchase Target
Increasing 2025 Share Repurchase Target Share Repurchases • Repurchased $105M of ($ millions) shares YTD through April $200+ 2025 $160 • Increasing 2025 share repurchase target from $120 $180M+ to $200M+ $350M Rate Swap $59 3.03% $218M • Targeting four consecutive +225 bps TLA SOFR years of increasi
Slide 22: Q2 2025 and FY 2025 Outlook
Q2 2025 and FY 2025 Outlook Prior Revised Q2 2025 FY 2024 FY 2025 FY 2025 Metric Outlook Actual Outlook Outlook Revenue $600 - $605 million $1.8 billion $2.00 - $2.04 billion $2.03 - $2.05 billion Gross Profit Margin N/A 54% 51.5% - 53% 54% - 55% SG&A N/A $612 million $640 - $660 million $650 - $670
Slide 23: We Are Near Our Lowest Valuation Ever
We Are Near Our Lowest Valuation Ever… 20.0x ~18x 15.0x 10.0x ~8x 5.0x 0.0x Sep-18 Feb-19 Jul-19 Nov-19 Apr-20 Aug-20 Jan-21 Jun-21 Oct-21 Mar-22 Jul-22 Dec-22 May-23 Sep-23 Feb-24 Jun-24 Nov-24 Apr-25 Source: FactSet data as of 4/16/25; analysis based on enterprise value compared to next twelve mon
Slide 24: Frontdoor Is Delivering Outstanding Results, Raising Guidance, Ready for Tomorrow
Frontdoor Is… Delivering Raising Ready for Outstanding Guidance Tomorrow Results $350M Rate Swap 3.03% $218M +225 bps TLA SOFR +150 bps 24
Slide 25: Questions?
Questions? 25
Slide 26: Appendix
Appendix '®@ frontdoor 26
Slide 27: Q1 2025 Consolidated Results
Q1 2025 Consolidated Results Three Months Ended March 31, $ millions, except per share amounts 2025 2024 Better/(Worse) Revenue $426 $378 $17 YoY Growth 13% Gross Profit $235 $195 $41 % of revenue 55.2% 51.5% 380pts Selling and administrative expenses $151 $135 ($16) % of revenue 35.5% 35.8% 30pts D
Slide 28: Net Income to Adjusted EBITDA Reconciliation
Net Income to Adjusted EBITDA Reconciliation Twelve Months Three Months Ended Ended March 31, December 31, ($ millions) 2025 2024 2024 Net Income $ 37 $ 34 $ 235 Depreciation and amortization expense 23 9 39 Restructuring charges 1 - 8 Provision for income taxes 11 11 74 Non-cash stock-based compens
Slide 29: Net Income to Adjusted Net Income Reconciliation
Net Income to Adjusted Net Income Reconciliation Three Months Ended March 31, ($ millions) 2025 2024 Net Income $ 37 $ 34 Amortization expense 13 1 Restructuring charges 1 - Acquisition-related costs 2 - Tax Impact of adjustments (3) - Adjusted Net Income $ 49 $ 35 Adjusted Earnings per Share Dilute
Slide 30: Net Debt and TTM Adjusted EBITDA Reconciliation
Net Debt and TTM Adjusted EBITDA Reconciliation As of and for the Twelve Months Ended March 31, ($ millions) 2025 Term Loan A $413 Term Loan B 798 Total Debt – Face Value (A) $1,211 Discounts and issuance costs (20) Total Debt – Book Value $1,193 LCs Outstanding (B) 2 Available cash and marketable s